Upgrades & Downgrades: Starbucks Worth More Bucks

Wall Street ratings agencies set the tone for today's stock market.

Moore's Law, meet Murphy's Law. On the day Google's (GOOG) doodle honored the 84th birthday of Intel's (INTC) co-founder, the semiconductor stock slumped 4.04% after issuing a revenue warning, taking the Dow ($DJI) down with it. (Presumably it was all a marvelously Machiavellian plot by Scooter, that anti-capitalist member of The Muppets who is employed by the Internet search giant in the current movie.) Edvard Munch, the Norwegian painter also born yesterday, may have been a better choice of honoree in light of the market's foul mood; certainly a downgrade of Norwegian oil giant Statoil ASA (STO) sent its shares sliding 4.09% on a day investors everywhere wanted to Scream. To paraphrase Karen Carpenter, Rainy days and Moody's brought stocks down on Monday, the agency adding to the angst by saying it will review its ratings of all European Union countries. Financials fared worst amid heavy losses in light trading, with a bank run in Latvia only amplifying the anxiety. Since joining the European Union, this Baltic nation has become the party capital of the continent for boozy Brit bachelors, so Prime Minister David Cameron can't really claim that closer integration has done nothing for his country.

Indeed the laugh was on England's increasingly isolated leader yesterday, after Cameron International (CAM) imploded 5.56% in a weak energy sector. At least running on banks keeps the calories at bay; on a day McDonald's (MCD), up 8,000% since 1980, topped the Dow in making another new all-time high, us Americans are alas unable to say the same. Intel apart, it was a bad day for chips all round with Diamond Foods (DMND), attempting to own Pringles, dropping 22.83% to post the Russell 2000's poorest performance. And Bank of America (BAC) retreated a further 4.72%, the worst blue chip on the day as it has been all year. That "geezer bandit" who just robbed one of its branches really should show some sympathy and pick on someone his own size. Today in economics, all eyes are on the FOMC's final interest rate decision of the year at 2:15 p.m. Eastern. On the earnings front ABM Industries (ABM), Best Buy (BBY), FactSet Research (FDS), Learning Tree International (LTRE), and Pantry (PTRY) are all due to report results.

Initiations:

Boeing (BA): Lazard launches Buy rated coverage on the key Dow component, establishing an $84 price objective. The stock is trading higher ahead of the open as a result.

Kratos Defense and Security (KTOS): Shares are covered with a Perform recommendation at Oppenheimer. Shrewd recent acquisitions are balanced out by cyclical headwinds facing the overall US defense industry, the broker believes.

Robert Half International (RHI): Morgan Stanley raises its rating by 180 degrees, Overweight from Underweight.

Rubicon Technology (RBCN): Ticonderoga raises its rating to Neutral from Sell on a belief that sapphire pricing could bottom in early-2012 with strengthening LED demand by mid-2012 leading to firming wafer prices.

ADTRAN (ADTN): Shares are now Neutral from Buy at Mizuho, which also trims its target by $3 to $35 following ADTN's recent acquisition announcement of the fixed broadband business of Nokia Siemens Networks. Though they are bullish on the international expansion strategy, the broker remains concerned about near-term margin and earnings implications.

USG Corporation (USG): USG gets downgraded to Sell from Neutral at Goldman, sending their shares slumping before the bell.

Southern Copper (SCCO): The stock is reduced to Underweight from Equal Weight by Barclays.

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